ESMA publishes guidelines for implementation of amended EMIR rules

Rick Steves

EMIR Refit will enter into application on 29 April 2024.

The European Securities and Markets Authority (ESMA) has published guidelines to provide practical guidance on the implementation of the amended EMIR rules.

The rewritten rules aim to enhance the harmonisation and standardisation of reporting in order to ensure necessary high quality of data for the effective monitoring of the systemic risk.

Harmonisation and standardisation for monitoring of the systemic risk

ESMA argues that harmonised and standardised reporting allows to contain the costs along the complete reporting chain: the counterparties that report the data, the TRs which put in place the procedures to verify the completeness and correctness of data, and the authorities, which use data for supervisory and regulatory purposes.

The Guidelines provide clarifications on the following aspects:

  • transition to reporting under the new rules,
  • the number of reportable derivatives,
  • intragroup derivatives exemption from reporting,
  • delegation of reporting and allocation of responsibility for reporting,
  • reporting logic and the population of reporting fields,
  • reporting of different types of derivatives,
  • ensuring data quality by the counterparties and the TRs,
  • construction of the Trade State Report and reconciliation of derivatives by the TRs,
  • data access.

The final report on Guidelines is accompanied by the validation rules and the reporting instructions (here and here).

The validation rules document sets out detailed technical rules on how the TRs should verify the completeness and accuracy of the reported data as well as the conditions and thresholds to be applied to determine whether the values reported by both counterparties match or not. Finally, the Validation rules document contains also a template for notifications of reporting errors and omissions to the NCAs.

The reporting instructions contain EMIR XML messages which were updated or newly developed based on the revised technical standards and validation rules.

EMIR Refit enters into effect on 29 April 2024

A fully standardised format for reporting will eliminate the risk of discrepancies due to inconsistent data. End-to-end reporting in ISO 20022 XML is expected to further enhance data quality and consistency and mitigate the data integrity risks, by reducing the need for data cleaning/normalisation and facilitate their exploitation for various supervisory and/or economic analysis based on the changes presented by the EMIR Refit regulation. The implemented schema sets were designed to ensure the backward compatibility of the data reporting.

The final report contains a detailed assessment of the feedback received to the proposals in the consultation paper published in July 2021. ESMA will continue to engage with the market participants with a view to clarifying any remaining doubts and to facilitate a smooth transition to reporting under EMIR REFIT.

EMIR Refit will enter into application on 29 April 2024.

Point Nine addresses EMIR Refit in reporting solution for brokers, banks, asset managers

Point Nine, the Cyprus-based leader in trade and transaction reporting, has been warning banks, brokers, and asset managers to fully prepare for the upcoming rules while there is still time.

The firm’s chief executive Andreas Roussos has recently attended the Finance Magnates London Summit 2022 to present Point Nine’s complete solution to fully deal with the new requirements and complexities of the rewritten rules.

FinanceFeeds spoke with Point Nine’s Roussos at the event in an interview that will soon be published on our website.

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